Short sellers borrow shares to sell them in hopes of buying them back cheaper at a later date, aiming to profit from a price decline. While many short sellers have benefited from betting against BlackBerry, some have recently booked profits.

As the chart below shows, the percentage of BlackBerry shares on loan—a proxy for short-selling activity—stands at about 22% of the combined Canadian and New York stock listings, according to securities-financing tracker Markit. That’s off from the record high 32% hit at the end of June.

Markit

By comparison, short interest in an S&P 500 stock, on average, sits at about 2%.

“Shorts have covered significantly due to a degree of profit taking, but even at this lower level short interest is still very high,” Markit director Alex Brog said in a chat with MoneyBeat.

BlackBerry’s preliminary results, released late Friday, showed the company has acknowledged its efforts to regain market share in the crowded smartphone market have fallen flat. BlackBerry will write off nearly $1 billion in inventory of its new touch-screen phones.

It also won’t market its phones to consumers anymore, instead focusing solely on corporate and professional customers. Between its dwindling cash pile and waning sales, the question isn’t whether BlackBerry can compete in the smartphone market, but whether it can survive as an independent company.

That’s why falling short interest has coincided with the stock price’s recent tumble. The more the shares fall, the greater the likelihood BlackBerry will get acquired, which is a prospect that many short sellers don’t want to be part of.

“If BlackBerry becomes a takeover play and attracts a considerable premium, you have to be aware of that,” he says. “Short sellers do try to time their exit. They don’t hang around until a stock price hits zero.”